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Motoring
Work out your used car budget
Negotiate the price of the used car confidently
How to buy a used car with confidence using our checklist
Be confident in your next used car purchase and avoid a potentially expensive mistake by following this checklist to buying a pre-owned car.
Buying any car is a big decision and one of the most expensive purchases you’ll make in life. When it comes to purchasing a used car, that decision can be further complicated as you consider vehicles that have already been driven thousands of kilometres and owned by one or more people.
While demand is high, used car prices have also cooled somewhat thanks to improved new car supply having a flow-on effect to the second-hand market. Electric vehicles and plug-in hybrid cars and SUVs are also increasingly available second-hand, though they still only account for a small percentage of used cars for sale in Australia.
More used cars might mean more options for buyers but there are still a number of elements to consider before handing over any money. Purchase your next used car with confidence by following our checklist.
Used car buying tips and checklist
Work out your used car budget
The first thing to do is to work out your budget and what you’re comfortable spending on a used car.
Your budget may be influenced by several factors including required vehicle size, must-have infotainment and safety features, how long you intend to keep the car and its estimated value retention, whether you will use the vehicle for business or ride-sharing purposes, in addition to whether you’re purchasing in cash or choosing to finance via a used car loan.
This handy car loan calculator can help you work out your budget if you choose to finance.
When determining your budget for your used car, always consider whether you have enough saved for registration, car insurance, servicing and maintenance, emergency roadside assistance, refuelling, any accessories you may require such as towbars, bike racks and even the installation of solar panel and batteries at home if you’re purchasing an EV.
It’s important to note that medium SUVs, large SUVs and utes typically have higher running costs than small hatchbacks and small SUVs. RACV’s latest Car Running Costs Survey can help you uncover the running costs of popular cars.
More: Best used cars to buy under $30K
Speak to an expert
If you have a good relationship with your mechanic, then they can be a great source to speak to when considering a used car purchase. If you’re a longstanding client, they may even be able to provide advice on what to buy based on your mileage and use of your current vehicle.
Speaking to a mechanic can also give you an idea of what future services might be required and how much they could cost. A car might seem like it’s in good condition now, but its age might mean it’s soon due to have expensive parts replaced, or you might not realise that the make of used car you’re considering has additional (or more costly) parts than your current vehicle.
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Create a shortlist of used cars to consider buying
As you read through online reviews, always consider how you’ll be using the car and how it integrates into your lifestyle and circumstances. One of the most important features to consider is how safe the vehicle is, and what safety tech it includes . Other merits that should be considered when creating your shortlist are infotainment systems, cargo-carrying capacity, interior space, off-road capability, engine and handling and of course, styling. Fuel efficiency is another important facet to consider, with the Australian Automobile Association (AAA) revealing that eight out of the 21 vehicles tested as part of their Real-World Testing Program consumed more fuel than in their laboratory testing results.
If you're looking to buy a second-hand electric vehicle, there are additional facets to inspect and enquire about. Check the battery range suits your lifestyle and what the vehicle and battery warranty are (these are often separate). Check the charging port for damage and ask if the seller will be providing at least one charger with the car. You'll also want to make sure your home is electric car ready so you can charge your vehicle once you get it home.
In addition to car reviews, helpful online resources for comparing different used cars include ANCAP’s how safe is your car, productreview.com.au and greenvehicleguide.gov.au. Some used cars may also come with a balance of new car warranty, giving you greater peace of mind.
More: The best used cars and SUVs to buy under $50K
Inspect shortlisted used cars and take a test drive
Now that you’ve put together a shortlist of three-to-five models to assess, the fun begins - it’s time to inspect the used cars in full daylight.
Use the inspections to assess the condition and features of the shortlisted used cars, such as paint condition, dents and scratches, underbody, interior plastics, tyres, lights, central locking and power seating.
Test that all door, boot and bonnet apertures open and close smoothly, and remember to bring along your mobile phone to test sync and compatibility with infotainment systems, as well as bulky items such as prams, sporting equipment and luggage if you’re keen to assess the used car’s cargo-carrying capacity.
A test drive of a used car is a must, helping you to understand on-road comfort, performance, fuel economy, safety systems, infotainment, road noise and any annoying rattles in the interior. It’s also a good idea to check the used car’s service handbook to ensure that all scheduled maintenance has been undertaken as per the manufacturer’s requirements.
If you’re feeling overwhelmed, bring a trusted family member or friend to help you assess the pros and cons of each used car.
More: Are there lemon car laws in Australia?
A vehicle inspection report can help uncover any faults not revealed in a standard Roadworthy Certificate
Purchase vehicle inspection and history reports
Once you’ve narrowed down your shortlist to the used car you want to purchase, it’s important to check if there’s any underlying mechanical or maintenance issues that aren’t obvious to the untrained eye.
It's important to request a Roadworthy Certificate (RWC) from the seller so you know the car is safe and fit for purpose. It's also worth seeking out a Vehicle Inspection Report in addition to the RWC, as this can pick up any issues not covered by the roadworthy check alone.
Vehicle inspections, conducted at RACV Accredited Auto Care Centres, can help you to make the right decision on whether to purchase a used car – and avoid an expensive mistake.
Similarly, vehicle history reports are a must-buy before purchasing used car, enabling you to understand if there’s any car finance owing, whether the used car has been written off or stolen, and much more. RACV Members can purchase a comprehensive vehicle history report at a special price.
Find out about the laws that protect buyers of used vehicles. Used cars less than 10 years old that have travelled less than 160,000km are covered by a statutory warranty in Victoria. This statutory warranty covers buyers for three months or 5,000km (whichever occurs first) from the time of their purchase. But it's important to note that this warranty only applies to used vehicles purchased from a licenced motor car trader, not private sales or auctions.
More: Car recalls - what to do if your car has been recalled
Negotiate the price of the used car confidently
Arriving at a fair purchase price can be one of the most daunting aspects of buying a used car. Confidently negotiate a fair price with the seller by arming yourself with the latest car valuation data and prices from online marketplaces.
Used car prices peaked in March 2023 and have since decreased, particularly in Victoria and NSW, with cars also taking more days on average to sell. Buyers can also expect used cars sold by authorised dealers to be priced higher than similar used cars sold by private sellers.
Once you’re happy with a price for the used car and sign on the dotted line, ensure that you have comprehensive car insurance in place before driving your new car home. Having Emergency Roadside Assistance as well can provide further peace of mind.
The information provided is general advice only. Before making any decisions please consider your own circumstances and the Product Disclosure Statement and Target Market Determinations. For copies, visit racv.com.au. As distributor, RACV Insurance Services Pty Ltd AFS Licence No. 230039 receives commission for each policy sold or renewed. Product issued by Insurance Manufacturers of Australia Pty Ltd ABN 93 004 208 084 AFS Licence No. 227678.
